Monday, April 10, 2017

The Navy’s Littoral Combat Ship (LCS)/Frigate program is a program to procure a large number of LCSs and modified LCSs. The modified LCSs are to be referred to as frigates. The LCS program has been controversial over the years due to past cost growth, design and construction issues with the lead ships built to each design (including, most recently, multiple problems with the ships’ propulsion systems), concerns over the ships’ survivability (i.e., ability to withstand battle damage), concerns over whether the ships are sufficiently armed and would be able to perform their stated missions effectively, and concerns over the development and testing of the ships’ modular mission packages. The Navy’s execution of the program has been a matter of congressional oversight attention for several years.

Two very different baseline LCS designs are currently being built. One was developed by an industry team led by Lockheed; the other was developed by an industry team that was led by General Dynamics. The design developed by the Lockheed-led team is built at the Marinette Marine shipyard at Marinette, WI, with Lockheed as the prime contractor; the design developed by the team that was led by General Dynamics is built at the Austal USA shipyard at Mobile, AL, with Austal USA as the prime contractor.

Prior to December 14, 2015, Navy plans called for procuring a total of 32 LCSs and 20 frigates, for a total of 52 ships. A December 14, 2015, memorandum from Secretary of Defense Ashton Carter to Secretary of the Navy Ray Mabus directed the Navy to reduce the LCS/Frigate program to a total of 40 ships. The memorandum also directed the Navy to reduce planned annual procurement quantities of LCSs during the Navy’s FY2017-FY2021 five-year shipbuilding plan, and to neck down to a single design variant of the ships not later than FY2019. Under current plans, the Navy envisages procuring a total of either 28 LCSs and 12 frigates (if the neck down occurs in FY2018), or 30 LCSs and 10 frigates (if the neck down occurs in FY2019).

The first LCS was funded in FY2005, and a total of 26 have been funded through FY2016. As of October 19, 2016, seven LCSs (LCSs 1 through 6 and LCS 8) were in service. LCS 7 is scheduled to be commissioned into service on October 22, 2016. LCSs 9 through 26 are in various stages of construction.

The Navy’s proposed FY2017 budget requests $1,125.6 million for the procurement of the 27th and 28th LCSs, or an average of $562.8 million for each ship. The Navy’s proposed FY2017 budget also requests $86 million in so-called “cost-to-complete” procurement funding to cover cost growth on LCSs procured in previous fiscal years, and $139.4 million for procurement of LCS mission module equipment.

The LCS program poses several issues for Congress, including whether to approve, reject, or modify the Navy’s FY2017 funding requests for the program, and whether to approve, reject, or modify the Secretary of Defense’s December 2015 direction to the Navy to reduce the program from 52 ships to 40, and to neck down to a single design variant not later than FY2019.